Digital asset management company Grayscale Investments released a research report on Thursday (30th) exploring the ownership distribution of Bitcoin (BTC) and delving into the “stickiness” of Bitcoin supply, analyzing why the company believes this metric is particularly important at present, and its potential impact on the future of Bitcoin.
Bitcoin ownership widely distributed
The Grayscale report points out that the distribution of Bitcoin ownership is more widespread than commonly thought, with the majority of Bitcoin holders being small retail investors spread across the globe. Statistics show that 74% of addresses hold less than 0.01 Bitcoin (valued at around $350 based on the price on November 6th), with only 2.3% of Bitcoin holders owning 1 Bitcoin or more.
While a significant portion of Bitcoin is also held by large entities, Grayscale notes that “the largest holders of most Bitcoin represent ‘the many’ rather than ‘the few’,” such as cryptocurrency exchanges representing millions of users, and government agencies.
Grayscale emphasizes the situation of other major holders in the report, with around 40% of Bitcoin supply concentrated among exchanges, mining companies ensuring network security, government entities, publicly listed companies, and exchange-traded funds (ETFs), as well as dormant addresses inactive for over ten years (long-term holders).
“The stickiness of supply” dynamic increasingly impacts Bitcoin price response
Grayscale’s research points out that some Bitcoin holding groups seem to represent “sticky supply,” resisting selling during price fluctuations. For example, researchers highlight that the supply of Bitcoin inactive for over ten years recently hit a historical high, while balances of miners and exchanges remained stable during Bitcoin’s fluctuations.
Grayscale suggests that this lack of flexibility may amplify the impact of external events driving new demand on prices in the short term, such as the potential approval of a Bitcoin spot ETF in the United States or the Bitcoin halving in 2024. Grayscale states:
The report anticipates that with the increase in illiquid supply and decrease in short-term supply, ownership dynamics will increasingly impact Bitcoin’s price response. Grayscale’s analysis emphasizes how the widespread distribution of Bitcoin among individual and institutional investors represents its growing acceptance and evolution. Additionally, according to the researchers, limited supply may enhance positive market forces.
The report concludes:
Data source